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Bank Statement Loans No Tax Returns Utah programs can help qualified self-employed borrowers buy or refinance a home using eligible bank deposits to document income. Instead of relying mainly on tax returns to calculate qualifying income, certain bank statement mortgage programs may review 12 or 24 months of personal or business bank statements.
This can be useful for Utah business owners, entrepreneurs, independent contractors, consultants and other self-employed borrowers.
Quick Answer: A Utah bank statement loan may allow an eligible self-employed borrower to qualify without using federal tax returns as the primary income calculation. The lender may analyze eligible deposits from personal or business bank statements instead. These are not no-income or no-documentation loans. Guidelines vary by lender.
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ALT: Bank Statement Loans No Tax Returns Utah for self-employed homebuyers
Caption: Bank statement mortgage programs may allow qualified Utah self-employed borrowers to document income using eligible bank deposits instead of traditional tax-return income calculations.
Request a Bank Statement Income Review
Bank Statement Loans No Tax Returns Utah: Key Facts
Here are the basics:
- 12-month bank statement programs may be available.
- 24-month bank statement programs may also be available.
- Personal or business statements may potentially be used.
- Tax returns may not be required for the primary income calculation under certain programs.
- Business statements may require an expense calculation.
- Purchase and refinance programs may be available.
- Cash-out refinancing may be available.
- Primary residences may be eligible.
- Second homes may be eligible under certain programs.
- Investment properties may be eligible.
- Jumbo bank statement financing may be available.
- Credit, LTV, reserves and loan limits vary by lender.
Start with the Bank Statement Loans Utah guide for an overview of the full program.
How Do Bank Statement Loans With No Tax Returns Work?
A bank statement mortgage changes how qualifying income is documented.
It does not eliminate income underwriting.
Traditional mortgage programs often use documents such as W-2s, pay stubs and tax returns. Self-employed borrowers may face a different challenge because taxable income does not always tell the complete story of a business.
The IRS explains that self-employed taxpayers determine net profit or loss by subtracting business expenses from business income. The IRS also recognizes ordinary and necessary business expenses under applicable tax rules. Read the IRS Self-Employed Individuals Tax Center.
A bank statement mortgage can take a different approach to mortgage income documentation. Eligible deposits may be reviewed over a set period to determine potential qualifying income.
The lender still underwrites the loan.
The Consumer Financial Protection Bureau explains that, for mortgages subject to the federal Ability-to-Repay rule, lenders generally must make a reasonable, good-faith determination that the borrower can repay the mortgage. Read the CFPB explanation of the Ability-to-Repay rule.
Why Would a Self-Employed Borrower Use Bank Statements?
Business owners can have strong revenue but lower taxable income.
Why?
Businesses have expenses.
Depending on the business, those expenses could include:
- Advertising
- Insurance
- Equipment
- Supplies
- Professional services
- Business-use vehicle expenses
- Office expenses
- Repairs
- Employee or contractor costs
- Other qualifying expenses
The IRS explains that ordinary and necessary operating costs may qualify as business expenses. See IRS Publication 334, Tax Guide for Small Business.
This matters for mortgage qualification.
A self-employed borrower may have healthy business cash flow but report less taxable income after legitimate expenses. A bank statement mortgage may provide another way to evaluate qualifying income.
12-Month vs. 24-Month Bank Statement Loans
Two common options are 12-month and 24-month bank statement programs.
12-Month Bank Statement Loans
A 12-month program reviews a shorter period of deposit history.
This may work well when the borrower's recent business activity provides a clear picture of current income.
Learn more about 12-Month Bank Statement Loans Utah.
24-Month Bank Statement Loans
A 24-month program uses a longer review period.
The longer history can help show income patterns over two years. It may also smooth out seasonal changes in business revenue.
See 24-Month Bank Statement Loans Utah.
The best option depends on the borrower, business, deposits and lender guidelines.
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ALT: 12 month vs 24 month Bank Statement Loans No Tax Returns Utah
Caption: Utah self-employed borrowers may have access to 12-month or 24-month bank statement mortgage programs, depending on lender requirements.
Personal vs. Business Bank Statements
Bank statement programs may use personal statements, business statements or an approved combination, depending on program rules.
Personal Bank Statements
A personal bank statement program may work when qualifying self-employment income is regularly deposited into the borrower's personal account.
Learn more about Personal Bank Statement Loans Utah.
Business Bank Statements
Many business owners receive revenue through a dedicated business account.
Business bank statement programs may analyze eligible deposits from that account. An expense factor or another approved method may then be used to estimate qualifying income.
Learn more about Business Bank Statement Loans Utah.
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Request a Bank Statement Income Review · Call Daniel Paris: 801-604-4949
